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BP spins off its windfarm business into joint venture with Japanese rival as it moves back to fossil fuels By JOHN-PAUL FORD ROJAS Updated: 22:02, 9 December 2024 e-mail 3 View comments BP is spinning off its offshore windfarm business into a joint venture with a Japanese rival. The deal comes as the energy giant’s boss Murray Auchincloss dials down the focus on renewable energy to move back towards its traditional focus on oil and gas. BP has previously said that it ‘aims to be a world leader in offshore wind’ and is developing sites in the UK, US, Germany, South Korea and Japan. But investors have been concerned about low profit margins in the sector amid supply chain issues and growing competition. And Auchincloss has been under pressure as the share price underperforms rivals. It is down by 16.6 per cent this year while Shell has fallen by only 1.9 per cent. BP shares rose 4.3 per cent, or 16.1p, to 393.85p yesterday. Oil man: BP boss Murray Auchincloss is dialing down the company's focus on renewable energy to move back towards its traditional focus on fossil fuels The joint venture with Jera, called Jera Nex BP, will include assets and projects in development with a combined potential to generate 13GW of power, a spokesman for the firms said. BP will contribute up to £2.5billion and Jera – Japan’s largest power generation company – £2billion for investments up to the end of 2030, though the companies pointed out that the sums may be lower. Analysts at investment bank RBC noted that BP had previously planned to spend £7.8billion on renewables over the 2022-2030 period with offshore wind likely to have been the biggest part. Even assuming £1.6billion has already been spent, the latest announcement ‘represents a significant reduction in spending in this area out to 2030’. Offshore wind was a key part of former boss Bernard Looney’s strategy to reduce BP’s greenhouse gas emissions by rapidly building up renewables capacity and slowing investments in oil. But that has been rolled back since he quit over a sex scandal last year. HOW THIS IS MONEY CAN HELP How to choose the best (and cheapest) stocks and shares Isa and the right DIY investing account In October, BP abandoned plans to cut fossil fuel output by 2030. Auchincloss has said that he will focus on the most profitable operations. He said yesterday that the joint venture would create one of the world’s top five wind developers. He added: ‘This will be a very strong vehicle to grow into an electrifying world, while maintaining a capital-light model for our shareholders.’ The offshore windfarm sector has been hammered by surging development costs, supply chain issues and higher inflation in recent years. RBC’s analysts said yesterday’s announcement ‘provides further evidence of evolving strategies [on energy transition], particularly in the offshore wind sector given recent industry headwinds and a much-changed interest rate environment’. DIY INVESTING PLATFORMS AJ Bell AJ Bell Easy investing and ready-made portfolios Learn More Learn More Hargreaves Lansdown Hargreaves Lansdown Free fund dealing and investment ideas Learn More Learn More interactive investor interactive investor Flat-fee investing from £4.99 per month Learn More Learn More Saxo Saxo Get £200 back in trading fees Learn More Learn More Trading 212 Trading 212 Free dealing and no account fee Learn More Learn More Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence. Compare the best investing account for you Share or comment on this article: BP spins off its windfarm business into joint venture with Japanese rival as it moves back to fossil fuels e-mail Add comment Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence. More top storiesFormer President Jimmy Carter dies at 100
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Eagles receivers Smith and Brown complain about vanishing pass offense during winning streakEmma Okonji Konga, a leading composite e-commerce group, is poised to transform the Nigerian media and commerce landscape with the upcoming launch of its AI-powered FM radio station in Lagos. The groundbreaking initiative, set to debut in January 2025, will mark Africa’s first Hit Music and Commerce Station, blending Technology, Entertainment, Commerce and more to drive impactful connections across the continent and the world. A reliable source reveals that the station – KongaFM, will be a pioneering platform to empower brands, distributors, and Original Equipment Manufacturers (OEMs) to connect with untapped markets, revolutionizing commerce in real time. While offering businesses a new avenue for product visibility and market penetration, the station promises to deliver non-stop hit music, ensuring listeners enjoy a unique mix of entertainment and commercial opportunities. It will be a completely new experience for Nigerians. The initiative will also complement Konga’s existing TV arm and other media services, positioning the brand as a dominant force in marketing communications. The platforms are expected to create synergies that set new benchmarks for how entertainment and commerce converge in Africa while streaming globally. When asked for further details, CEO of Konga Group, Prince Nnamdi Ekeh, dwclined comment, stating that “full details and official announcements will be made in January 2025.” The anticipation around the launch continues to grow as industry experts and media enthusiasts eagerly await what is already being hailed as the next major evolution in Africa’s media and commerce space.